Aerospace Industrial Development Corp (AIDC, 漢翔航空工業), the nation’s largest civilian and military aircraft manufacturer, might see rapid earnings growth in 2018 in light of stronger order backlog, analysts said.
“Although we are positive on the company’s outlook beyond next year, we foresee modest revenue and earnings growth for this year and next year,” Yuanta Securities Investment Consulting Co (元大投顧) analyst Livia Wu (吳靚芙) wrote in a note published on Wednesday last week.
AIDC’s civil aircraft revenue is likely to be slow this year due to the company’s capacity restraints, and changes in models and delivery time issues with major clients such as Boeing, Wu said.
Earnings are to pick up as orders for narrow-body two-engine jet airliners, such as Boeing’s 737Max and Airbus’ A320neo, gradually approach their peak, starting in 2019, she said.
In addition, orders for the short-haul offering of Mitsubishi Aircraft Co, the Mitsubishi Regional Jet (MRJ), are to begin mass production in 2019, Wu said, adding that AIDC announced that its research and development phase as an original design manufacturing partner with the Japanese giant is expected to conclude this year.
Each MRJ is valued at about US$46 million to US$47 million, and Mitsubishi Heavy Industries had received orders to build 427 MRJs as of February.
AIDC reported a 7.84 percent annual rise in sales for last year, with sales in the first two months of this year increasing 11.51 percent annually to NT$4.31 billion (US$133.11 million), company data showed.
The company last month announced plans to distribute NT$1.36 in cash dividends this year, which would surpass last year’s NT$0.92 and set a new record.
Latest earnings results from the first three quarters of last year show that the company’s net income rose 40.7 percent annually to NT$1.66 billion. Earnings per share was NT$1.83.
The company is vying for a NT$69 billion Republic of China Air Force project to upgrade its aging fleet of 66 trainer aircraft.
The deal is crucial for AIDC, as it is expected to yield revenues of NT$200 billion for parts and maintenance over their service life spanning the next two decades, Liao said.
In a visit to the company last month, president-elect Tasi Ing-wen (蔡英文) urged the company to meet the air force’s required contract specifications and to lead the nation’s initiative to expand domestic development capabilities.
AIDC chairman Anson Liao (廖榮鑫) said the company has launched an “A-team” initiative, an alliance with tier-one players in the nation’s aerospace supply chain, aiming to take a larger share of the US$5 trillion global market.
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